Understanding the Basics:
Adjudication becomes relevant when a claimant disputes a valid payment schedule. In such instances, Adjudicate Today or Rialto Adjudications Pty Ltd become the designated platforms for adjudicating the claimed amount, provided the application is submitted within 10 business days of receiving the payment schedule.
Adjudication was introduced because the construction industry needed a faster and cheaper way to resolve payment disputes instead of going through slow and expensive court processes. The government stepped in because industry groups were worried about their members not getting paid on time or at all.
Why Opt for Adjudication?
Adjudication is designed to be a swift and informal process, ensuring that money continues to flow seamlessly in the building and construction industry. It represents a viable alternative to the extensive legal battles often associated with payment disputes. Instead of claimants initiating legal action to secure payment, they hold the money, and respondents must commence court proceedings to reclaim funds.
Key Steps in the Adjudication Process:
- Payment Schedule Compliance: The payment schedule must adhere to specific criteria, including being in writing, served within 10 business days, and stating the proposed payment amount.
- Adjudication Application: The adjudicator must determine the application within 10 business days, with a possible extension of up to 5 additional days upon the claimant’s agreement.
- Adjudication Response: Respondents may submit additional reasons for non-payment. If so, the claimant has two business days to respond.
- Further Submissions and Inspections: Adjudicators may seek additional submissions or conduct inspections as needed, with strict deadlines set for efficiency.
- Determining the Adjudication: The adjudicator considers various factors, including the contract, payment claim, schedule, and responses. The determination covers the progress payment amount, payment date, interest rate, and adjudication fees.
- Adjudication Certificate and Enforcement: Adjudicate Today issues the certificate upon full payment, enabling the claimant to enforce the determination in court.
- Fee Structure for Adjudication Certificate: The fee varies based on the adjudicated amount.
Understanding When to Use Adjudication:
- Disputes with Payment Schedule: If the claimant disagrees with the scheduled amount, an adjudication application must be filed within ten business days.
- Non-payment after Providing Schedule: If the respondent fails to pay the scheduled amount by the due date, an application for adjudication is required within 20 business days.
- No Valid Payment Schedule: In cases where a valid payment schedule is absent, and the claimant serves a Notice of Intent, an adjudication application is needed within ten business days after the notice period or provision of a valid payment schedule.
Adjudication is a potent tool for resolving payment disputes efficiently in the construction industry, ensuring timely compensation for work done. While the adjudicator’s decision is interim, parties retain the option for a comprehensive resolution through subsequent legal processes if necessary.
Adjudication Certificate and Beyond:
Once the adjudication certificate is issued, Adjudicate Today’s role is concluded. The certificate, a critical legal document, is meticulously checked and rechecked before issuance. Its issuance is a meticulous process, as obtaining a second “original” certificate is tedious unless the first is returned.
The fee structure for the issuance of an adjudication certificate is based on the adjudicated amount, ranging from $110 for amounts up to $15,000 to $825 for amounts exceeding $750,000.
Enforcement and Judgment:
To enforce the adjudication determination, the claimant must obtain an adjudication certificate, allowing formal notification to the court about the determination, payment date, and amount due. The relevant date for payment is typically five business days after the adjudicator’s determination is served on the respondent, or as determined by the adjudicator.
The amount due includes the adjudicated amount, the respondent’s share of adjudication fees, including the certificate fee, and any interest on the unpaid progress payment from the due date to the adjudication certificate date.
Conversion to Court Judgment:
The process involves filing the adjudication certificate, along with an affidavit of debt, in a court of appropriate jurisdiction. The court enters judgment based on the affidavit, and the judgment debt becomes enforceable like any other court judgment in Victoria.
Adjudication Certificate Form:
A downloadable Adjudication Certificate Form is provided for convenience, emphasizing its interactive nature for electronic or manual completion.
Setting Aside the Judgment:
In rare cases, respondents may seek to set aside the judgment for the adjudicated amount. However, this requires the respondent to pay into court as security the unpaid portion of the adjudicated amount. Courts are typically cautious about intervening unless grounds such as the absence of a construction contract, non-service of a payment claim, or fraud are demonstrated.
Considerations for Respondents and Claimants:
Respondents should be aware that non-compliance with an adjudication determination can have repercussions, including potential exclusion or suspension from approved tenders at the Commonwealth and state levels.
